ASSEMBLY APPROPRIATIONS COMMITTEE

STATEMENT TO

[First Reprint]

ASSEMBLY, No. 1126

with Assembly committee amendments

STATE OF NEW JERSEY

DATED: MAY 13, 1996

      The Assembly Appropriations Committee reports favorably Assembly Bill No. 1126 (1R), with committee amendments.

      Assembly Bill No. 1126 (1R), as amended, revises the "Resource Recovery and Solid Waste Disposal Facility Bond Act of 1985" (P.L.1985, c.330) to authorize the use of a portion of the bond moneys by the "New Jersey Environmental Infrastructure Trust," and to specify the uses to which the bond moneys may be spent.

      The 1985 bond act was approved in November 1985 by the voters of New Jersey. The proposed revisions to the "Resource Recovery and Solid Waste Disposal Facility Bond Act of 1985" contained in this bill are also required to be approved by the electorate.

      The "Resource Recovery and Solid Waste Disposal Facility Bond Act of 1985" authorized the issuance of $85 million in State general obligation bonds for the purpose of making loans to local governments for financing the construction of resource recovery facilities and environmentally sound sanitary landfill facilities.

      This bill provides that the $85 million in bonds authorized pursuant to P.L.1985, c.330 will be used to make low interest or zero interest State loans to local governments for financing the costs of solid waste management projects identified pursuant to the project priority list adopted by the Commissioner of the Department of Environmental Protection (DEP). Solid waste management projects would include: (1) the construction of composting facilities, materials recovery facilities, recycling centers, resource recovery facilities and environmentally sound sanitary landfill facilities; (2) municipal solid waste landfill closure projects; and (3) landfill mining projects.

      The 1985 bond act provides that payments of principal and interest on loans made from the "Resource Recovery and Solid Waste Disposal Facility Fund" would be repaid to that fund. This bill provides that up to $40 million in these loan repayments may be made available to the "New Jersey Environmental Infrastructure Trust," a proposed financing authority which would be empowered to make loans and loan guarantees to local governments for financing the costs of solid waste management projects pursuant to the "New Jersey Environmental Infrastructure Trust Act" (a companion measure, Assembly Bill No. 1511 of 1996).

      The bill authorizes the Trust to use those bond moneys to secure local debt and to secure revenue bonds or other debt issued by the trust, the proceeds of which will be used to make loan guarantees to local governments for the costs of financing eligible projects. The bill also authorizes the Trust to use interest earnings on bond fund moneys for administrative expenses and authorizes DEP to cover its administrative expenses from moneys in the "Resource Recovery and Solid Waste Disposal Facility Fund."

      The bill also provides that moneys from canceled resource recovery facility projects would revert to the "Resource Recovery and Solid Waste Disposal Facility Fund." There is approximately $2.5 million in unappropriated funds in the Fund, inclusive of interest earned and loan repayments received. The return of moneys from canceled resource recovery facility projects in Bergen County, for which a $15 million appropriation was made to the DEP from the Fund pursuant to P.L.1985, c.335, and Passaic County, for which a $13.3 million appropriation was made to the DEP from the Fund pursuant to P.L.1988, c.86, would increase the available balance in the "Resource Recovery and Solid Waste Disposal Facility Fund" to approximately $30.8 million.

      If the "New Jersey Environmental Infrastructure Trust Act" has not been enacted into law by the date of the approval of this bill by the voters in November, 1996, the amendments made to the 1985 bond act pertaining to the Trust would remain inoperative.

FISCAL IMPACT:

      This bill is not certified as requiring a fiscal note; the amendments to the bond act made by the bill, if approved by the voters, allow but do not require the use of previously authorized bonded indebtedness for financing the costs of solid waste management projects. The bill appropriates $5,000 to publish notice of the bond question.

COMMITTEE AMENDMENTS:

      The amendments allow DEP to cover its administrative costs out of bond moneys, subject to appropriation by the Legislature, and make clarifying changes to the form of the public question.